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Subnational Investment Climate Assessment 2022: Denmark

Published: November 09, 2022
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Subnational Investment Climate Assessment 2022: Denmark, Finland and Sweden assesses the regulatory environment for businesses and its impact on local entrepreneurs in 6 cities in Denmark (Aalborg, Aarhus, Copenhagen, Kolding, Naestved and Odense), 6 cities in Finland (Helsinki, Mariehamn, Oulu, Tampere, Turku and Vaasa) and 8 cities in Sweden (Gävle, Göteborg, Jönköping, Malmö, Stockholm, Sundsvall, Umeå and Uppsala). The study measures regulations relevant to five stages in the life of a small to medium-size domestic firm: business start-up, building permits, electricity connection and supply, property transfer, and commercial litigation. In each of these areas, the study highlights good practices that can be leveraged to empower local entrepreneurs and firms.

Doing Business in the European Union is a series of subnational studies requested and funded by the European Commission, Directorate-General for Regional and Urban Policy, and produced by the World Bank Group. Previous editions, covering cities from Austria, Belgium, Bulgaria, Croatia, the Czech Republic, Greece, Hungary, Ireland, Italy, the Netherlands, Portugal, Romania, and Slovakia, were released in 2017-2021.

Where is it easier to do business in Denmark?

Main findings

  • Danish entrepreneurs deal with a similar business environment independent of where in the country they establish their business. Of the 16 EU member states assessed by this series, Denmark registers the most homogeneous business environment across locations. This is mainly due to the advanced digital portals through which entrepreneurs from any Danish city perform most procedures.
  • Three of the five areas benchmarked show some variations in the efficiency of the regulatory process: building permits, obtaining electricity connections, and resolving commercial litigation. These disparities can help policy makers identify which cities have good practices that other cities can adopt, and make improvements without major legislative overhaul. All Danish cities obtain the same score on business start-up and property transfer: these areas are not subject to subnational variation.
  • Næstved leads on building permits and commercial litigation, Aarhus on electricity connections. Odense ranks second on both commercial litigation and electricity connection. Copenhagen ranks at or near the bottom of the three regulatory areas where there are local variations.
  • One of the strengths of the Danish business environment is the presence of well-functioning e-government services across all areas. Denmark is a source of inspiration for economies looking to introduce e-government tools.
  • Despite the strong performance of Danish cities, further improvements could be achieved. For example, while obtaining electricity in Denmark is faster and less costly than in the average EU location, it requires more interactions on the part of clients. Similarly, when starting a business in Denmark, entrepreneurs need to deposit a minimum capital higher than the EU average. Denmark could look for good practices in other EU member states—or within its own borders.